Survey Says Millennials Want To Live In New York, Research Suggests They Should Live In Philadelphia…Hmm?

In a recent survey one-in-five Millennials said New York is their ideal city. Less than 1% said the same of Philadelphia. Ironically, however, the city of Ben Franklin and cheesesteaks outranks its more popular brethren when it comes to qualities the young purport to value.

Millennial-run apartment search site Abodo set out to determine what their generational-peers look for in a city to call home by surveying 2,000 people born between 1982 and 1998. Respondents rated 20 qualities on a 1 to 10 scale, with 10 connoting the highest importance.

It turns out, the top three qualities Millennials want in a city are economic in nature: a thriving job market (average score: 8.19), affordable rent (7.94) and affordable home prices (7.55). Beyond those core three, the ratings for quality of life metrics were fairly evenly dispersed. Rounding out the top third of the list were parks or hiking trails (6.52), non-chain restaurants (6.49) and quality pizza (6.11). Meanwhile, items ranging from top-rate public schools (6.07) to an LGBTQ-friendly environment (5.47) to access to music venues (5.38) all have above average ratings. In fact, the only quality not achieving a score greater than five was the presence of a local college or university (4.99).

To Sam Radbil, communications manager at Abodo, the survey shows “Millennials are career driven.” He added, “Despite Millennials’ reputation for being lazy or entitled they care about the job market and their careers. They are looking for a place that is affordable.”

Interesting distinctions arise when the group is divided by age range, comparing 18-to-22 year-olds with 23-to-28 year-olds and 29-to-34 year-olds. Employment and housing are key concerns among all three groups, though affordable rent outranks job prospects only for the youngest cohort.

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For the oldest group home purchase price becomes more important than rental prices. While unsurprising, the differences among age groups do reflect recent trends. After years of hand-wringing over whether young people would participate in this traditional rite of passage, surveys suggest Millennials do want to buy and that as they get older they are taking the ownership plunge. According to the National Association of Realtors, Millennials now make up the largest share of home buyers at 35%. The median age of a first time buyer is currently 31.

(Courtesy Abodo)

When it comes to location, nearly 20% of people surveyed list New York as their perfect city. Next up is San Francisco at 10%, Seattle and Portland at 9% and Los Angeles at nearly 8%. All of these cities have 80% or more of the 20 qualities Abodo pegged as important and most have several of the traits Millennials value highest. By Adodo’s calculations, however, several cities that barely registered with the survey-group may have more of what the generation is looking for, including Philadelphia (which got top city rating from just 0.89% of people), Washington D.C. (1.36%) and Boston (2.3%).

The company judged Philadelphia as the best city for Millennials in part due to solid marks on job market (the Philadelphia region’s unemployment rate was 20 basis points below the national average when the data was pulled) and average home prices (sale and rental) of at or below 30% of average income.

(Courtesy Abodo)

Of course, some of the metrics are subjective–a New Yorker may not agree Philadelphia has quality pizza. (Disclosure: the author of this post lives in New York, went to college in Philadelphia and has strong feelings about pizza.) But the survey’s broader point–that places you’ve never thought of may have exactly what you’re looking for–remains indisputable.

A California Bungalow on West Newton Hill. This former ranch was transformed in 2004 with the addition of a family room and a most serene 2nd floor Master Bedroom Suite. An inviting home which feels sunny, warm and expansive. Extremely flexible floor plan allows for 1st or 2nd floor master. Timeless cherry kitchen features high-end appliances and granite counters which flows into a spacious family room. The private yard is large and level. The property also features a covered porch and deck which can be accessed from the dining room or family room. 2004 kitchen, baths, electric, plumbing, HVAC, roof, windows etc. 15,000+ level lot may be suitable for a builder.

September 26, 2014

For a growing share of older Americans, housing expenses have become an increasingly large financial burden.

One in three Americans over age 50 were carrying a severe or moderate housing cost burden in 2012, up from one in four in 2000, according to a new study by Harvard’s Joint Center for Housing Studies and AARP. The Center defined a severe burden as housing costs that consume more than half of household income; a moderate housing burden takes between 30 percent and 50 percent of income.

The Center’s report, “Housing America’s Older Adults – Meeting the Needs of An Aging Population,” warns that the nation is unprepared for both the financial and non-financial housing challenges that will accompany the coming explosion in the elderly population. Aging baby boomers will require better access to public transit, handicap access, assisted living facilities and other special services and amenities, and many will need subsidized housing.

Housing is often an older person’s largest single expense. And because housing costs are largely fixed (think mortgage payment, taxes, insurance, upkeep and utilities), they can become a growing burden for people as they age and become more vulnerable to reductions in income. Incomes often decline toward the end of their working years and decline again when they enter retirement. Pensions and Social Security benefits fall again when one spouse dies.

The report finds that:

Nearly 17 percent of people over age 50 are moderately burdened, spending from 30 percent to 50 percent of their income on housing.

Another 16 percent spend more than half of their income on housing.

Some 3.9 million households over age 62 are eligible for rental assistance – but only 1.4 million receive it.

In 2010, about three out of four homeowners ages 50 to 64 were still paying off a mortgage, up from about two in three in 1992.

Last week, Discover Home Loans released an interesting survey which revealed how prepared home buyers are for the actual mortgage process. The survey reported that 94 percent of prospective buyers believe they are making a good investment decision if they buy a home. The survey also explained that 66 percent of buyers reach out to real estate agents to help determine whether buying a certain home would be a good investment. However, there is less certainty regarding the mortgage process.

Most buyers overwhelmed

The majority of potential buyers are actually overwhelmed with the plethora of information available about the home financing process. Here are some interesting highlights from the report:

Nearly 66% feel overwhelmed with the amount of information available

76% of those under the age of 30 feel overwhelmed

76% of first time buyers feel the same way

54% of those buyers who have previously owned also were overwhelmed

59% of buyers turn to mortgage bankers to help evaluate mortgage terms and comparing offers

49% of buyers turn to real estate agents to help evaluate mortgage terms and comparing offers

There is help available…use it!

“The industry is becoming more transparent in an effort to help homebuyers become informed about changes that may affect their process. The sheer amount of information can lead to confusion and stress. Those looking to purchase should work closely with their lender and realtor to make sure they are comfortable with mortgage terms and understand the impact a loan will have on their finances.”

Bottom Line

The purchasing of a home can put great pressure on a family. Reach out to the qualified mortgage and real estate professionals in your market for assistance throughout the process.

The market is moving along at a summer pace but moving nonetheless. Well priced homes are still being scooped up quickly and that is important as we make the transition into the fall market. I predict that this fall we will see a significant uptick in properties selling over 2 million dollars….Let’s see if I am right. Currently there are 144 single family homes on the market, only 38 are under 1 million dollars, 106 over 1 million with 54 of the 106 over 2 million! 29 homes went under agreement in the last 2 weeks and 15 were over 1 million. There was even one sale over 5 million. During the last 2 week 27 homes closed and the strongest price range was 1 million to 1.5.

If you are considering a home sale or purchase in the next few months or next spring (spring market starts here in mid January to early February) now is the time to begin the process. Allow me to show you how to get top dollar and make your move as seamless as possible.

There has been a lot written about how buying a home is less expensive than renting one in most parts of the country. Rents are skyrocketing and homes are still at great prices. These two situations are also causing some sellers to consider renting their home instead of selling it. After all, a homeowner can get great rental income now and perhaps wait until house values increase even further before selling.

This logic makes sense in some cases. There is a strong belief that residential real estate is a great investment right now. However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for.

Before renting your home, you should answer the following questions to make sure this is the right course of action for you and your family. The most important question is your motivation for renting.
Do you wish to rent your house now because you think it will be worth more in a few years? Is that realistic? If you over paid for a house a few years ago but the house is in great condition and the floor plan works for today’s buyer, than rent it. You will probably make some money after you cover the monthly expenses. Do you want to rent for an emotional reason? Maybe you just want to try out a new lifestyle such as living in the city or maybe you’re not sure if the suburbs are what you want. If you can afford this option than by all means go for it. This option works best if you can afford to buy a new home without selling your current home. Why? If you are considering renting because you NEED a certain amount of money and are hoping a rising market will add value, you must be honest with yourself. Is this home going to rise in value ENOUGH to fulfill and fund the next dream? Why isn’t your current house selling? Other than the price the most obvious reason homes are selling for less money is an obsolete floor plan. A functionally obsolete home is described as:

An original house in an older part of town that has two bedrooms and one bathroom could be considered functionally obsolete if all the other original homes in the area are torn down over the years and replaced with five bedroom, three bathroom houses. Because the old house does not have the features that most modern buyers want, it is said to be functionally obsolete, even if it is still in good condition and is perfectly livable.

As another example, many home entertainment centers became functionally obsolete as flat-panel televisions replaced bulky analog televisions. The old entertainment centers were too deep to accommodate the new, thin televisions.

If your floor plan is obsolete today it will be obsolete next year also! If you wait 20 years and we have a new generation of buyers who will ask why did those people take down all those walls, maybe they will want your house. Every house is salable …. The question is always at what price. A wise person once said to me that price melts away objections and that is the truth. When a house is not up to a buyer’s standards they mentally deduct from the price of the house so they can make those changes, if they are up to making changes. Buyers’s pay a premium for a renovated house while a house that seems antiquated will sell at a discount. As brokers, we often ask ourselves why sellers spent so much money renovating and they didn’t fix the floor plan. Sellers when you are looking for a new home, honestly evaluate what you are looking for. Do you want to do work? Do you desire the open floor plan? Do you want a dedicated home office? Do you want a living room and a dining room and a family room? So if you decide to rent ask yourself these questions.

What happens when the tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).

Because of the economy, many homeowners cannot make their mortgage payment. What percentage of tenants do you think cannot afford to pay their rent?

Have you interviewed experienced eviction attorneys in case a challenge does arise?

Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?

Will you allow pets? Cats? Dogs? How big a dog?

How will you actually collect the rent? By mail? In person?

Repairs are part of being a landlord. Who will take tenant calls when necessary repairs come up?

Do you have a list of craftspeople readily available to handle these repairs?

How often will you do a physical inspection of the property?

Will you alert your current neighbors that you are renting the house?

Bottom Line

Again, renting out residential real estate is historically a great investment. However, it is not without its challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.